From Planetizen, Slate

Robots, Not RoadsThe Obama stimulus package should be spent on transformative investments, not bridges and buildings.

By Eliot SpitzerPosted Monday, Jan. 5, 2009, at 4:09 PM ET

The incoming Obama administration and Congress are planning a huge fiscal stimulus package. They hope that such a stimulus will catalyze an economic turnaround and be a cornerstone of a "New New Deal." If the early reports are reliable, the stimulus will include a huge tax cut and will fund projects like road-building and bridge repair, laying the infrastructure foundation for the economy of the future.

Yet two huge problems with this approach must be confronted. First, the capacity of even the U.S. government to affect the overall global economy is limited. Suppose the package is $800 billion over two years: $400 billion is less than 1 percent of the global economy and a mere 3 percent of the U.S. economy. In relative terms, $400 billion isn't all that much more than the $152 billion spent on the 2008 stimulus, which had nary an impact on the economy.

Here is where the New Deal analogies are instructive. The New Deal probably didn't pull us out of the Depression; World War II did that. What the New Deal did was redefine the social contract—perhaps just as important an outcome. The ultimate significance of the Obama package may be not its short-term demand-side impact but rather its capacity to transform our economy and, in turn, some of the fundamental underpinnings of our society. This introduces the second major problem: The "off the shelf" infrastructure projects that can be funded immediately and provide immediate demand-side stimulus are almost by definition not the transformative investments we really need. Paving roads, repairing bridges that need refurbishing, and accelerating existing projects are all good and necessary, but not transformative. These projects by and large are building or patching the same economy with the same flaws that got us where we are. Our concern should be that as we look for the next great infrastructure project to transform our economy, we might rebuild the Erie Canal and find ourselves a century behind technologically.

This moment presents the administration with what is likely to be its best—and perhaps only—opportunity to have essentially unlimited capital (both fiscal and political) to spend on a transformative economic agenda. It is a unique moment to build a new foundation. It would be wise to ensure that a significant portion of the stimulus package is spent on new investments that may not be quite as ready to go but are surely more important to our long-term economic viability. There are many such critical investments, but here are a few for consideration. These are not, of course, the only ideas, and they may not be the best ideas. But they should spur discussion of how to use the fiscal stimulus not just to put people to work but also to build the over-the-horizon projects that will set the stage for the next great American economic miracle.

In the energy arena, two investments are critical. The first is smart meters. These would permit, with a smart grid, time-of-day pricing for all consumers, with potentially double-digit reductions in peak demand, significant cost savings, and consequential remarkable energy and environmental impacts. These declines in peak demand would translate into dramatic reduction in the number of new power plants. The problem with installation of smart meters has been both the cost and, often, state-by-state regulatory hurdles. Now is the moment to sweep both aside and transform our entire electricity market into a smart market.

Second, the most significant hurdle to beginning the shift to nongasoline-based cars is the lack of an infrastructure to distribute the alternative energy, whether it is electricity—plug-in hybrids—or natural gas or even hydrogen. Once that infrastructure is there, it is said, consumers will be able to opt for the new technology. If that is so, let us build that infrastructure now: Transform existing gas stations so they can serve as distribution points for natural gas or hydrogen, build plug-in charging centers at parking lots, and design units for at-home garages. These would, indeed, be transformative investments.

In health care, everybody agrees that electronic record-keeping is a universal win: errors reduced, public health gains from the ability to know what is actually being delivered, a dramatic improvement in primary care. But again, the cost has been prohibitive, because the upfront expenditure is enormous and the benefits are long term and hard to measure. We should condition state receipt of Medicaid bailout funds on a new infrastructure of electronic medical records. No single health care step would be more transformative.

America lags the world in Internet service and access. Our Internet backbone is worse than that of competing nations. We should spend to upgrade it.

In education—just as much a part of our infrastructure as bridges and roads—here is a small investment that is one of my favorites: Provide funding for robotics teams at every school. If you ever want to see intellectual competition in the arena that matters today—technological wizardry—visit the robotics competitions that now exist in some schools. Make these competitions as universal as football. Make it cool to design the next cutting-edge video game or iPod.

These are just a few possible infrastructure investments. The list is long, and the right infrastructure could provide the basis for a redirected economy. Long term, the most important investments are not on the easy list of "off the shelf" projects. Yes, good roads and bridges are important. But investing in the necessary public goods to support a post-hydrocarbon, information-based economy is a much better choice than using the stimulus to patch up the old economy.

Urban economics, rumors and government policy

Urban economics is a huge topic that I couldn't possibly do justice to in a blog post. A few blogs devoted entirely to the economics of cities do a pretty good job though. I highly recommend Ryan Avent, an economist who follows transportation and development issues in his blog The Bellows.

I just want to talk a little about a hot new topic: President-elect Obama's plan for a White House Office of Urban Policy. Now first of all, it is SUCH a relief to have a President who understands and appreciates the city--and the immense challenges and potential in America's cities. Unfortunately, these days, it's not often one sees the words "great" and "cities" in sequence. In 1961, a resident of New York City named Jane Jacobs published a book called "The Death and Life of Great American Cities". Until the resuscitation of the past decade, anyone who paid attention would have to say that the "Great American City" was dead. Anyone who didn't pay attention might forget that such a thing had ever existed. But thanks to a variety of factors--including demographic shifts making singles and empty-nesters the predominant American family type--cities are coming back.

I first saw Obama's suggestion of an Office of Urban Policy (OUP) way back in primary season, back when Clinton continued to insist "It's only a flesh wound", and people actually believed it. At the time, I was a bit skeptical. When we already have a Cabinet-level Department of Housing and Urban Development, what exactly would this OUP do except further bloat the bureaucracy? HUD sends around 4-7 billion dollars a year to cities for the purpose of providing housing, homeless assistance, and economic development. It spends another $30 billion or so on public housing and other housing assistance. A President sympathetic to cities could increase those numbers of course, but could also effect policy by simply redirecting it and guiding it to better uses.

But the more I thought about it, and the more I came to understand the limitations that HUD has (independent of money), the more I started to think that the OUP could be a great initiative. COULD be a great initiative. So here is why it could be good, and what it should do in order to be good.

First of all, the OUP will combine the efforts of the multiple departments that have a role to play in cities. The primary ones are HUD and the Department of Transportation. As long as the Federal Highway Administration and other highway funding mechanisms have a budget 5 times as large as the Federal Transit Administration, cities face an uphill battle. But even if the money doesn't change, if it can be coordinated with HUD grants and HUD-required planning efforts that local governments undergo, then we can make some progress. Other offices, like the Dept. of Education, Dept. of Health and Human Services, and the Small Business Administration can certainly be coordinated to better serve our cities. I'm focused on investing in the built environment though, rather than investing in human capital, so I won't address their potential--however, we need a President and Executive Branch leadership who does understand the roles of all these organizations and can tie them together.

The best candidate I've heard for OUP is Bruce Katz. Katz is a former Chief of Staff at HUD, and currently runs the Metropolitan Policy Program at the Brookings Institution. Brookings is a truly elite think tank in DC (THE elite think tank, in my opinion), and their Metro Program is a high profile comprehensive effort to draw attention to the immense value created by America's Metro areas ("Metro areas", because our cities are no longer defined by central business districts). The Metro Program is staffed by some of the most brilliant minds working in housing, transportation, and economics, and Katz is the man who runs the show. For what it's worth, he's also on Obama's transition team for HUD, and has been spotted in the HUD building.

Now, even with Katz at the head of the new OUP, it will have challenges. What is the office's authority? Will it control any money? It's easy to say multiple Departments should coordinate--how will they make it happen? Perhaps most importantly, the Federal government does not control cities. Hell, even cities don't control cities--citizens do. No matter how eloquently President Obama speaks about cities, or how much money is funneled to them, cities will continue to face an uphill battle until the American public begins to think more critically about those things they have come to take for granted. We all need to be more realistic about the costs of transportation, about the costs of land, about the costs of energy. We need to realize that a neighborhood where people look different, have varying incomes, or live in close proximity does not make it a dangerous neighborhood--it makes it interesting. We all need to get out of our cocoons--our cars, our backyards, our air conditioned living rooms with big screen TVs and video games--and remember (or dream about) what it's like to live in a great American city.

Obama

What a great week for our nation!  Finally, the American majority has voted to create a new direction for our country, and themselves, as it certainly required much thought and reflection to vote for a bi-racial candidate.  It is a great accomplishment for black-Americans, and it was very moving to see black-Americans across the country rejoicing!!  

An Obama presidency also has implications for various aspects of Green Urbanism.  Clearly, the automobile is here to stay, but we need more efficient automobiles.  Obama's pledge to automakers hopefully will be taken and used wisely, when the gift is given.  

More importantly, Obama has dedicated a portion of his campaign website to Urban Policy.  This includes addressing housing (affordable, energy-efficiency), transportation infrastructure (including train systems and public transport), livability of communities, urban education, and poverty.  A specific quote from his website appropriately relates to Green Urbanism:

"Our communities will better serve all of their residents if we are able to leave our cars, to walk, bicycle and access other transportation alternatives. As president, Barack Obama will re-evaluate the transportation funding process to ensure that smart growth considerations are taken into account."

http://origin.barackobama.com/issues/urban_policy/

To have a president that even acknowledges the concepts of alternatives to cars, and smart growth will hopefully make our country measurably better by the end of his second term (fingers crossed).  If we can provide this much, then we can actually begin to reduce our multiple-earths ecological footprint (http://www.footprintnetwork.org/en/index.php/GFN/ ,  http://www.footprintnetwork.org/en/index.php/GFN/page/personal_footprint_calculator/).